Rio Alto Corporate Presentation-November 2013 v2

8/11/2019 Rio Alto Corporate Presentation-November 2013 v2

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Corporate PresentationNovember 2013

“Inspiration and Innovation”



TSX: RIO BVL: RIO NYSE: RIOM FSE: MS2

Capital Structure

3

TSX: RIO

BVL: RIO

NYSE: RIOM

Frankfurt FSE:

MS2

Shares Issued (Nov. 1, 2013): 176.7 million

Warrants Outstanding Nil

Options Outstanding: (Av. Exercise Price – C$ 2.03) 7.9 million

Fully Diluted: 184.6 million

Share Price:

C$1.74

as at 06/11/2013

Market Cap (issued capital): approx. C$ 307.5 million

16% ‐ Sentry Capital

9% ‐ Management

+16% ‐ Peruvian Investors




Dr. Klaus Zeitler | Non Exec Chairman

Alex Black | President, CEO

Anthony Hawkshaw

| CFO

Victor Gobitz Colchado | Director

Drago Kisic Wagner | Director

Sidney Robinson | Director

Ram Ramachandran | Director

Dr. Roger Norwich | Director

Board of Directors

4

Commitment?..........Percentage of company held by Chairman, President, CEO, CFO, COO

AUQ : 0.1% AEM : 0.2% AGI : 0.7% AR : 1.9%

BTO : 1.6% P : 0.7% TMM : 3.7% RIO : 4.2%

Share Ownership of RIO Directors – 7%




Share Price Performance & Analysts

5

ANALYST COVERAGE

GMP Securities George Albino +1 416 943 6187

BMO Nesbitt Burns Inc Brian Quast +1 416 359 6824

Scotia Capital Mark Turner +1 416 863 7484

Clarus Securities Inc Mike

Bandrowski +1

416

343

3352

Stonecap Securities Inc Christos Doulis +1 416 342 9992

Desjardins Capital Markets Adam Melnyk +1 416 607 3081

Raymond James Adam Low +1 416 777 4943

Euro Pacific Capital Inc Heiko Ihle +1 800 727 7922

Kallpa Securities SAB Humberto Leon +51 1 630 7500

Larrain Vial Vicente Rodriguez +56 (2) 2616 5546




• Startup 2011: 10 month build, $50M capex, 10,000 tpd

• Mine

Expansions 24,000 tpd

2011,

36,000

tpd

2012

• Production 2012: 201,113 ounces of gold

• Guidance 2013: 190 – 210,000 ounces of gold

• Production Upside Consistent Positive Grade Reconciliation

• Re‐optimization Oxide mining @ $1,200 – lowering costs & strip ratio

• Reserve Growth Q1 reserve update and exploration plan

• Feas. Study Phase 2 Estimated completion Q2 2014

• Extensive exploration program on 27,000 ha property – ongoing

• Proactive

exploration

strategy

– regional

and

rest

of

Peru

Strong Progress

6

“A record of execution and delivery”




Minimal Debt – Gold Loan

7

Amount US$ 50 million

Total Obligation 61,312 “notional” ozs Min. o z s 5 2 , 1 1 5

Max.

o z s 7 0 , 5 0 9

Price Range $1,450 repay 85% of ozs BASE $1,150 $950 repay 115% of ozs

Status (as at 1 October 2013)

44,144 “notional”

ozs repaid Min.

o zs o w in g

14,593

17,593 “notional” ozs owing Max. o z s o w i n g 19,743

Due Date October 2014

Payments to

Date Made

through

to

February

2014

Plus $3M debt facility ‐ matures October 2014

Total Debt approx $25M




La Arena ‐ Location

8

• Located in a gold mining district in north

central Peru

• 3.5 hour drive from Trujillo, on mostly

paved

road• Land package – approx 27,000 ha

• Altitude 3,400m above sea level

• 18 km east of Barrick´s Lagunas Norte Gold

Mine

• 10km

north

of

La

Virgen

Gold

Mine

owned

by Cia Minera San Simon

• Strong community support

• No agriculture

• Excellent infrastructure




Reserves (as at Jan 1, 2013)

9

Material ClassificationOxide Ore Sulphide Ore Metal Mined

Tonnes (Mt) Au (g/t) Tonnes (Mt) Au

(g/t) Cu

(%) Au

(oz) Cu

(lbs)

Like ly Oxide PitSe dime nts Prove d 5.6 0.47 84,000

Pr obable 47.9 0.52 803,000

Final pit e xcluding

oxide pit

Se dime nts Prove d ‐

Probable 8.0 0.39 100,000

Por phyr y Prove d 0.1 0.32 0.29 1 ,500 942, 000

Pr obable 268.7

0.24

0.33

2 ,0 91 ,0 00 1 ,9 45 ,9 29 ,0 00

Pit De sign* 61.5 0.50 268.9 0.24 0.33 3 ,0 80 ,0 00 1 ,9 46 ,8 71 ,0 00

Mineral Reserve – Oxide & Sulphide

Within Pit Design, block cut‐off NSR calculation ($1,400 Au, $3.00 Cu)

* Rounded numbers may not sum exactly

Allows

for

98%

mining

recoveryMined surface at 1 January 2013.

Resources and Reserves are included in a NI 43‐101 technical report filed

on

SEDAR

Updated oxide reserve estimate – Q1, 2014

based on

$1,200

gold

price

&

3rd iteration

of

block

model




Near Term Reserve Upside Opportunity

10

Oxide (Epithermal)

Oxide (Porphyry)

RESERVE PIT

SEDIMENTARY INTRUSIVESE

NW

Potential to add approx 1 year to oxide reserves(subject to technical work to be completed by Q1 2014)

Calaorco Colluvial Zone




Medium Term Reserve Upside Opportunity

11

Potential to add approx 1 to 2 years to oxide reserves

(subject

to

technical

work

still

to

be

completed)

Lack of drilling




Positive Grade Reconciliation Continues

12

PORPHYRY

HIGH GRADE ZONE

(Approx. 1g/t Au)

CALAORCO

PIT

HIGH GRADE NW STRUCTURES

(Upwards of 100g/t over

10‐20cm widths)

DEPTH POTENTIAL

WEST WALL

Looking SE




2013 Performance to date

13

Highlights for the three months ended September 30, 2013

Adjusted net income ‐ $17.0 million ($0.10 per share)

Net income ‐ $15.9 million ($0.09 per share)

Cash provided by operations ‐ $35.5 million

Gold produced and sold ‐ 59,157 ozs at average realized price of $1,310 per oz

Capital investments ‐ $19.4 million ; exploration spending ‐ $2.0 million

Highlights for the nine months ended September 30, 2013

Adjusted net income ‐ $34.9 million ($0.20 per share)

Net

income ‐

$20.8

million

($0.12

per

share)

Cash flow from operations ‐ $57.3 million

Gold produced and sold ‐ 144,092 ozs at average realized price of $1,384 per oz

Capital investments ‐ $55.2 million ; exploration spending ‐ $5.8 million




Gold Production & Guidance

14

Production & Sales

Production 2012 201,113 ozs

Production Guidance 2013 190 – 210,000 ozs

____________________________________ _____________________________________ _____________________________________ ___________________________________

Cost Guidance for 2013 Q3 Actual Guidance (13 Nov)

Adjusted Operating Cost US$ 675 to US$ 725 / oz $569 approx $650

All‐in sustaining costs US$ 900 to US$ 1,000 / oz $808 approx $900

All‐

in

costs US$ 1,200

to

US$

1,300

/ oz $961

approx $1,200

________________________________________________________________________________________________________________________________________________

Mine Plan Re‐Optimization (in progress)

$1,200 pit

(excl.

upside) LOM

(from

July

2013)

After

Tax

Cash

Flow

(incl.

Sustaining

Capital)

@ US$ 1,000 : approx $155M

@ US$ 1,500 : approx $340M

All‐in sustaining costs Reducing on annualized basis due to mining fleet reduction

and diminishing pad construction




La Arena – Social & Community

15




La Arena – Environment

16

Reclamation work on

waste dump No. 1

Reclamation work on

waste dump No. 1




La Arena – Gold Oxide Mine Layout

17

L a y o u t f r o m J u l y 2 0 1 0

Re port

Pad Space available by end 2013

Current Leach Pad




Ore Production ‐ 36,000 tonnes per day

La Arena – Gold Oxide Mine (cont.)

18

Calaorco Pit

Leach Pad

Ethel Pit

PLS Pond

Process Plant

Major Events Pond





19

Ore Production : + 36,000 tonnes per day

CAT777 Dump TruckRH90 Excavator

Mining Fleet Reduction

2013 – 4 fleets

2014 – 3 fleets

2015 – 2 fleets

2016 – 2 fleets

1 fleet = 1 exc + 7 trucks





20

Calaorco Pit Panorama – July 2013

Calaorco Pit – June 2013




• Feasibility study (bankable) – 18,000 tpd

• Target Phase 2 capex ‐ $ 200M to $ 250M

• 30Mt to 60Mt starter pit – target grades approx 0.4 % Cu, 0.3 g/t Au

• Target : +20% IRR (post taxes)

• Current timing for FS completion – Q2 2014

• Locate all of Phase 2 project within current oxide mine EIA boundary

• Permitting process started in May 2013 – EIA approval prior to end 2013

• Clean

copper

concentrates with

gold

credit

– FS

met

tes two rk o ngo i ng

• Projected Start‐up Production – approx 50M lbs Cu and 40,000 oz Au pa

• Phase 3 – scoping level work : open pit v underground

La Arena – Phase 2 (feasibility study underway)

21



TSX: RIO BVL: RIO NYSE: RIOM FSE: MS2 22

40Mt pit 150Mt pit

Long term sulphide plan – Phase 3

SECTION 9126500 N

approx 115Mt @ 0.7% Cu , 0.53g/t Au

at 0.5% Cu cutoff

Open Pit or Underground?

drillholes ended in mineralization @ 1000m

Cu, Au, Mo grades increase with depth




La Arena – Phase 2 & Phase 3

23

La Ramada LOM Waste Dump

Phase 3

Current EIA Boundary

Freylones LOM Tailings Site

Phase 3

La Ramada Electrical Substation

Phase 2 Starter

Pit

Sulphide Plant Site

Phase 3 Pit

Outline

Road Deviation

1 km

Land owned by

La Arena SA

Land to be purchased

by La Arena SA




Feasibility study activities

Permitting of Phase 2 : Phase 2 EIA approval expected Q4, 2013

Phase

2

Construction

Permit

expected

Q2,

2014

Mine Plan : Optimize mine schedule for Phase 2 and timing of Phase 3 project

Ore & Waste Handling: Detail the option of in‐pit crushing and conveying of ore and waste for Phases

2 and 3

Met. Testwork : Testing and trade‐off work to improve Au recovery from 40%

Waste & Tailings Options : Review alternatives for tailings and waste deposition (Phase 3)

Phase 2 Capex (next 12 months)

Study Costs US$ 3M (committed – est completion Q2, 2014)

Substation and Transmission Line US$ 16M (committed – est completion Q3, 2014)

Surface Rights Acquisitions (Phase 3) US$ 12M (planned to be completed in 2014)

Plant Long Lead Items US$ ? (subject to feasibility study detail)

La Arena – Phase 2 (feasibility study underway)

24




La Arena – Geology

25

July 2010 Report – Reserve Pit Shell




27,000 ha ‐ multiple gold and copper exploration targets

La Arena ‐ Au Oxide Exploration

26




Regional and Peru Exploration

10,000 ha within 30km

of La

Arena

La Libertad Department

Santa Barbara Resources

Earn‐inAyacucho Department

Duran Ventures

Earn‐inHuancavelica Department




Sancos Prospect – Santa Barbara Resources

Hol e ID From To Interval Au g/t

SARC 001 0 14 14 0.35

SARC 003 0 22 22 0.46

SARC 005 0 22 22 0.27

SARC

005 30 38 8 0.30

SARC 006 8 98 90 0.29

SARC 011 0 154 154 0.45

SARC 012 82 100 18 0.47

SARC 019 0 94 94 0.47

SARC 020 38 56 18 0.29

SARC 021 52 82 30 0.40

Highlights ‐ Previous Drilling




Minasnoic Prospect – Duran Ventures Inc.

Hole ID FROM TO Interval Au g/t Ag g/t

M NB‐

03 110.5 146.85 36.35 0.20

16.21M NP‐02 0 57.15 57.15 0 .55 3.66

M NP‐03 10 60 50 0.33 13.63

Incl uding 30 50 20 0.51 28.29

M NP‐06 40 78 38 0.14 53.02

M NP‐07 5.65 69.1 63.45 0.53 8.18

M NP‐10 10.55 1 00.2 8 9.65 0.23 13.72

M NP‐14 0 62 62 0.34 20.74

Incl uding 34 52.3 18. 3 0.48 30.37

M NP‐16 12 83.4 71.4 0.44 5.48

Incl uding 28.55 46.25 17.7 1.38

11.49

M NP‐23 74.05 300.23 226.18 0.45 5.31

Incl uding 146 176.9 30.9 1.86 21.06

M NP‐28 68 78 10 0.57 1.26

Highlights ‐ Previous Drilling

Rio Alto Corporate Presentation-November 2013 v2

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Transcript of Rio Alto Corporate Presentation-November 2013 v2